On August 31, MENGNIU DAIRY fell 3.05% in regular trading, trading at HK$17.84/share, with turnover of HK$72.32 million, marking the third consecutive session of decline since the release of interim results on August 26.

The company reported H1 revenue of RMB 44.795 billion, up 7.8% year-over-year, and attributable net profit of RMB 2.371 billion, up 15.9%. However, granular data revealed operating profit growth of only 3.9%, significantly lagging revenue growth, while operating cash flow declined 11.1% and gross margin contracted 0.9 percentage points to 40.8%, reflecting cost and expense-side pressure. Selling and distribution expenses rose 6.4%. Notably, the profit improvement was partly driven by associates swinging from a loss of RMB 585 million to a profit of RMB 40 million.

Despite multiple brokerages — including UBS, BOCOM International, and Jefferies — raising target prices and maintaining buy ratings, the stock had already accumulated over 30% in gains year-to-date prior to the results release, intensifying post-earnings profit-taking pressure.

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